CINEPLEX ODEON DISCLOSES IMMINENT LOAN DEFAULT

THE NORTH American exhibition sector has taken another blow after Loews Cineplex Entertainment, the second-largest exhibitor, announced it would default on a major bank loan by the end of August.
It’s the fourth piece of financial news for the industry in as many weeks, reflecting the pinched economics, caused by aggressive expansion strategies.
Georgia-based Carmike Cinemas and California-based Edwards Theatre Circuit both filed for bankruptcy protection this month, while United Artists Theatres is understood to be at the tipping point.
Chains are building bigger and more advanced multiplexes that are in turn cannibalising audiences of their older cinemas.
Exhibition analysts say that supply far outstrips demand. As many as 12,000 of the current 37,000 North American screens may be redundant.
New York City-based Loews, whose theatres are primarily in major US, Canadian and European cities, also issued a second-quarter loss warning, with significantly reduced revenue and cash flow.
Loews, owned by Sony Corp, merged with Canada’s Cineplex Odeon in 1998.
Besides operating its own-brand theatres, Loews is also a partner in Magic Johnson Theatres, Star Theatres, Yelmo Cineplex de Espana, De Laurentiis d’Italia and Transturk Cineplex.